www.inddist.com January/February 2015 / INDUSTRIAL DISTRIBUTION 15
tions from the same source, as well as any agreements that affect
their post-employment obligations. One example from this case
study is the provision fixing the law, venue and jurisdiction in a
• Consider, in the appropriate context, extending indemnification
to an employee hire that “is worth the risk.”
• Evaluate the likelihood of litigation: what does an employee
know, how did he/she obtain information, was it from prior experience in the industry, how long had he/she been employed before
seeking new employment?
• Instruct the potential new-hire to maintain all communications as
confidential and not to discuss them with anyone, particularly with
• Implement a “clean” paper trail, showing not only your efforts
to avoid any impropriety and ensuring (by representation and
warranty) that you as the hiring employer are following all key
• Don’t let any employee leave their prior employment with any
materials of his/her former employer and don’t ask for any such
material — PERIOD.
• Don’t ask for any information about the employee’s former employer and/or his/her role at the former employer.
• Don’t encourage any former competitor’s employee to engage
in any solicitation or any other activity that could benefit or be
“spun” to have benefited your company before the employee
physically resigns and is no longer employed by your competitor.
• Avoid any conduct, e-mail communications and/or promotional/
marketing plans or projects that suggest that you, as the new employer, intend to target customers of the former employer, particularly those who may have worked with and/or been serviced by the
• Keep the e-mail traffic clean: avoid any e-mails (or other electronic documents) that might imply or be read out-of-context as
inflaming, disparaging or reflecting any intent to harm the former
Recruiting or even employing new employees from competitors
is laden with inherent risk. Employers can minimize that risk
by following basic protocol. While many aspects of hiring new
employees from competitors are beyond what I have touched on
in this article (e.g., what to do if you learn of post-employment
covenants, how to handle former employer legal communications,
etc.), employer should consult counsel. The tangled web that can
be created by what is perceived to be a harmless defection of
even one employee can create significant legal problems and lead
directly to the courthouse. As the old adage goes, an ounce of
prevention is worth a pound of cure! I would be happy to discuss
this topic in more detail with any interested distributors.
For more information on this topic, contact Fred at fmendelsohn@
burkelaw.com or 312-840-7004.